What Is a Mod Factor and Why You Want to Lower Yours

mod factor is your experience modification rate

Most industries have a lot of acronyms and jargon that can be confusing to anyone not immersed in the lingo. The same is true of workers’ compensation insurance. Simply put, a mod factor is your experience modification rate, a number that represents your business’s prior workers’ comp claims. A low mod factor allows you to pay lower premiums because your risk is considered lower.


Obviously, it pays to keep your claims as low as possible. That’s where our workers’ comp captive insurance program can help. It blends the benefits of a traditional workers’ comp policy with self-insurance. Our experienced team administers the program, providing the necessary legal, accounting, and claims management structure, combined with our risk management services, human resources support and wellness programs. You reap the rewards of lower premiums, tax benefits, greater financial stability and profits that come back to your business.


Mod factor: by the numbers

Mod factors commonly range between .70 and 1.50. Ideally, you want your mod factor to be below 1. Because we only accept profitable, well-run businesses into our captive, we’re currently running loss ratios of less than 30% and mod factors averaging .88. 


Contact us to learn more about our workers’ comp captive and whether it might be the smart option for your company. Even if you don’t qualify immediately, our risk and financial management solutions can help you get there while helping you manage your risk and reduce costs.

Why not Share?

About the author

David Sinclair is the CEO of The WorkPlace Solutions and Sinclair Risk & Financial Management.

Are you ready to turn one of your biggest business expenses into a profit center?

The goal of The WorkPlace Solution is to provide our exclusive group of members a solid program to reduce claims and turn what once was a large draw on their P&L statement into a profit center.